Dear Scroobal
The consolidated fund is the main current account for the Fiance Ministry. All tax revenues, contributions of 20% of profit from stat board, GIC MAS and Temasek, CPF Bond sale proceeds, Gov debt sales etc all go into the consolidated fund.
From there the quarterly dispersions to ministries for their projects and expenditure are given. In view of the lag in the expenditure of public money, the consolidated fund as the central current account can be substantial. For example xxx ministry allocated xxx amount for a project which stretches over three years.
The lack of clarity in how the reserves are spent is due to the deliberately vague language about the usage of the reserves. The quantum remains up to 50% can be used as net investment income without ever declaring how much of that limit was used.
The recent debate in parliament was I believe an amendment not only to spend the interest or dividend income, but also to be able to spend the capital gains whilst protecting principle.
With regards to Temasek and why GIC was not covered by the amendments it was due to the losses they have suffered and according to Hansard for Oct 2008 they are already down 7% on the year with an injection of 10 billion.
Locke
